If a Television Factory Wanted to Conspire with Its Competitors

question 137

Multiple Choice

If a television factory wanted to conspire with its competitors to raise the price of televisions, which of the following would help stabilize the long-term viability of such a cartel?

• A) prevent co-conspirators from differentiating their product in trivial ways
• B) create an advertising campaign that depicts watching TV shows on a computer as a negative experience
• C) secure a government subsidy that goes to all TV manufacturers
• D) cut everyone's marginal cost of production

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Definitions:

Many Firms

A market situation where there are a large number of sellers, offering a variety of products.

Profit-Maximizing Quantity

The point of production where a firm reaches its maximum profit potential.

Panel

A group of individuals or experts gathered to discuss, analyze, or make decisions on specific subjects.

Intersection

The point at which two lines or paths cross each other.